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How Retargeting Works: Delivering Ads to the Right Consumers

If you've ever gone from one website to another and saw an ad for a product you viewed earlier at an online store or website, then you've experienced retargeting. This process, in the simplest terms, uses digital marketing techniques to target website visitors who left a site before completing a conversion.

While it might seem that a failed conversion is a sign that a consumer will not convert, online research suggests that this isn't the case. According to CMO.com, only about 2 percent of visitors to any given commerce website make a purchase on their first visit, but many more will ultimately execute a related conversion through that online retailer or through one of its competitors.

Retargeting helps businesses stay visible to consumers and increases the chance of ultimately gaining their business. It's a simple marketing strategy that offers great returns when executed properly, and many businesses are investing in these campaigns.

How Retargeting Works

This form of hypertargeting is done through cookie-based technology that has been built into online browsers for years. These cookies are acquired from websites that consumers visit, and they serve as a record of Internet-browsing activity. When you use this type of campaign, a piece of code is installed on your website. The code gives consumers an identifying cookie that they carry to other websites, and the cookie tells the display ads on those websites which ads to display — all based on their browsing activity on your website.

As a result, you pay for this practice only when a consumer visits a website where your display-ad network is up and running. Each ad exposure is to a visitor that previously visited your website and that your marketing strategy determined to be a high-value potential conversion.

Other Approaches

While website retargeting is the best-known form of this marketing practice, it's not the only way to retarget. Online search platforms, for example, provide different display ads based on user queries. This doesn't necessarily mean that the consumer has visited the retailer's website in the past. Instead, it targets more behavior than a specific online action.

Email campaigns can also be a part of targeting efforts, particularly when consumers drop out of the path to purchase. Companies such as Amazon will send follow-up emails based on a consumer's near-purchase or will recommend other items that might interest the consumer. Brands and competing businesses may even partner to share the same cookies. In this scenario, competitors agree to trade consumers that failed to make a conversion on their own website.

Retargeting can help you increase your chance at conversion by keeping your products fresh in consumers' minds. With effective retargeting strategies, you can turn interested viewers into successful conversions.